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Incremental operating cash inflows A firm is considering renewing its equipment to meet increased demand for its product. The cost of equipment modifications is S1.9 million plus $100,000 in installation costs. The firm will depreciate the equip- ment modifications under MACRS, using a 5-year recovery period. (See Table 4.2 on page 120 for the applicable depreciation percentages.) Additional sales revenue P11-16